Cordy Oilfield Services Inc. Reports Third Quarter and Year to Date
Results
CALGARY, CANADA--(Marketwired - Nov 28, 2013) - CORDY OILFIELD
SERVICES INC. (the "Corporation" or "Cordy") (TSX-VENTURE:CKK)
released today its third quarter results for the period ending
September 30, 2013.
Throughout 2013 and
the current quarter, Cordy continues to experience revenue growth
from its two largest segments, Heavy Construction and Environmental
Services.
THREE MONTHS ENDING SEPTEMBER 30,
2013
The Corporation's
revenues from operations for the three months ended September 30,
2013 decreased $2.0 million to $32.5 million, down from $34.5
million in the same period in 2012. The Corporation experienced
revenue growth in Heavy Construction, Environmental Services, and
Manufacturing and Supply segments from increased demand from the
2013 Alberta flood, continued strength in the Cold Lake Oil Sands
Region ("Oil Sands Region"), and new customers in the Manufacturing
and Supply segment. The decrease in revenue is as a result of
management streamlining its Pipeline and Facilities segment from
two locations to one and a drop in pipeline construction in 2013
versus 2012.
Earnings before
interest, taxes, depreciation, amortization and impairment, and
share-based payments ("EBITDAS") from continuing operations for the
three months ended September 30, 2013 was $3.1 million compared to
$4.2 million for the three months ended September 30, 2012, a
decrease of $1.1 million. The decrease was primarily attributable
to the decrease in the Pipeline and Facilities segment, however,
Environmental Services EBITDAS decreased $0.3 million as a result
of the increased cost of renting equipment as opposed to carrying
owned equipment. Our rental arrangements allow for flexibility of
service but impacted expenses directly in the period. There was
also one-time severance costs of $0.6 million that contributed to
the decrease. Heavy Construction partially offset the decrease in
EBITDAS due to continued strength in the Oil Sands Region.
The net earnings
from continuing operations of $1.3 million or $0.01 per share for
the three months ended September 30, 2013 remains unchanged from
the three months ended September 30, 2012.
NINE MONTHS ENDING SEPTEMBER 30,
2013
The Corporation's
revenues from operations for the nine months ended September 30,
2013 were $90.2 million, a $1.4 million increase from the
comparative 2012 period. The Corporation experienced growth
primarily in the Oil Sands Region in the first quarter of 2013 as
well as an increase in the second quarter due to the 2013 Alberta
flood which increased demand for our equipment and services as part
of the flood clean-up. Cordy's Manufacturing and Supply segment
experienced an increase in revenue in the third quarter due to new
customers for PDC drill bits used in horizontal drilling. Overall,
increases in the Heavy Construction and Environmental Services
segments have continued to result in an increase in revenue year to
date.
Cordy had EBITDAS of
$7.1 million for the nine months ended September 30, 2013 compared
to $8.0 million for the nine months ended September 30, 2012, a
decrease of $0.9 million. The decrease was attributable to one-time
severance costs of $0.6 million in the third quarter and $0.3
million of professional and legal fees incurred in the second
quarter of 2013. For the nine month period ended September 30 2013,
Cordy experienced a decline in EBITDAS primarily due to our
Pipeline and Facilities segment as the segment has switched its
focus to pipeline spills as opposed to pipeline construction. For
the nine month period ended September 30 2013, the Environmental
Services and Heavy Construction segments increased their EBITDAS
due to increased activity in the Oil Sands Region and the Alberta
flood clean-up which offset the decline in the Pipeline and
Facilities segment.
For the nine months
ended September 30, 2013, Cordy had net earnings from continuing
operations of $1.3 million, a decrease of $0.2 million from the
nine months ended September 30, 2012 earnings of $1.5 million.
For the quarters ended September 30, |
|
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|
|
|
|
|
|
|
($ millions except share price and per share
amounts) |
Q3 2013 |
|
Q3 2012 |
Change ($) |
|
Q3 YTD 2013 |
Q3 YTD 2012 |
Change ($) |
|
FINANCIAL RESULTS |
|
|
|
|
|
|
|
|
|
|
Revenue |
32.5 |
|
34.5 |
(2.0 |
) |
90.2 |
88.8 |
1.4 |
|
|
EBITDAS1 |
3.1 |
|
4.2 |
(1.1 |
) |
7.1 |
8.0 |
(0.9 |
) |
|
Net earnings (loss) and total comprehensive income (loss) from all
operations |
1.3 |
|
1.3 |
- |
|
1.3 |
1.5 |
(0.2 |
) |
|
Cash flow s generated from (used in) operating activities from all
operations |
(2.2 |
) |
0.2 |
(2.4 |
) |
2.0 |
5.7 |
(3.7 |
) |
SHARE INFORMATION |
|
|
|
|
|
|
|
|
|
|
Earnings per share from continuing operations ($) |
|
|
0.01 |
(0.01 |
) |
0.01 |
0.02 |
(0.01 |
) |
|
Earnings per share from all operations ($) |
|
|
0.01 |
(0.01 |
) |
0.01 |
0.02 |
(0.01 |
) |
1 Earnings before interest, taxes, depreciation,
amortization, impairment and share-based payments (see reader
advisory). |
|
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|
|
|
For the quarters ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
($ millions except share price and per share
amounts) |
Q3 2013 |
|
Q3 2012 |
|
Change ($) |
|
Q3 YTD 2013 |
|
Q3 YTD 2012 |
|
Change ($) |
|
SEGMENT RESULTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heavy
Construction |
16.2 |
|
14.7 |
|
1.5 |
|
39.6 |
|
38.7 |
|
0.9 |
|
|
|
Environmental Services |
8.2 |
|
7.6 |
|
0.6 |
|
28.4 |
|
19.9 |
|
8.5 |
|
|
|
Manufacturing and Supply |
3.9 |
|
3.4 |
|
0.5 |
|
9.3 |
|
10.8 |
|
(1.5 |
) |
|
|
Pipeline and Facilities |
4.2 |
|
8.8 |
|
(4.6 |
) |
12.9 |
|
19.4 |
|
(6.5 |
) |
|
Total |
32.5 |
|
34.5 |
|
(2.0 |
) |
90.2 |
|
88.8 |
|
1.4 |
|
|
|
|
|
|
|
|
|
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|
EBITDAS1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heavy
Construction |
3.1 |
|
1.7 |
|
1.4 |
|
5.9 |
|
2.5 |
|
3.4 |
|
|
|
Environmental Services |
1.0 |
|
1.3 |
|
(0.3 |
) |
5.3 |
|
3.4 |
|
1.9 |
|
|
|
Manufacturing and Supply |
0.2 |
|
0.1 |
|
0.1 |
|
(0.5 |
) |
1.0 |
|
(1.5 |
) |
|
|
Pipeline and Facilities |
0.1 |
|
1.9 |
|
(1.8 |
) |
(0.3 |
) |
3.3 |
|
(3.6 |
) |
|
|
Corporate |
(1.3 |
) |
(0.8 |
) |
(0.5 |
) |
(3.3 |
) |
(2.2 |
) |
(1.1 |
) |
|
Total |
3.1 |
|
4.2 |
|
(1.1 |
) |
7.1 |
|
8.0 |
|
(0.9 |
) |
1 Earnings before
interest, taxes, depreciation, amortization, impairment and
share-based payments (see reader advisory).
OUTLOOK
Cordy has diverse
business units within four segments. Historically these business
segments have had stronger first and fourth quarters. The
Corporation is dependent, to a degree, on the overall health of
western Canada's oil, natural gas, and mining sectors. For the
balance of 2013 and into the first quarter of 2014, the prospects
for the Oil Sands Region are expected to be the primary driver for
our Heavy Construction and Environmental Services segments. Our
Pipeline and Facilities segment is expected to slow down over the
balance of 2013 and into the first quarter of 2014. In our
Manufacturing and Supply segment, the objective is to increase
sales of PDC drill bits used in horizontal drilling. There is no
assurance that the increased demand for PDC drill bits experienced
in the third quarter of 2013 will be sustainable over the balance
of 2013 and into the first quarter of 2014. Management continues to
seek opportunities to expand or realign Cordy's operations in
sectors where its business segments operate and to refinance the
business to support the Corporation.
SUBSEQUENT EVENT
Cordy has obtained a
$6 million secured loan on November 27, 2013. The Loan will be due
and payable on the six month anniversary of the closing date (the
"Maturity Date") and will bear interest at the rate of 14% per
annum, calculated daily. At Cordy's option, the term of the Loan
may be extended for an additional six months upon the payment of a
renewal fee of $300,000. There are certain affirmative and negative
covenants which the Corporation is in compliance with as at
November 27, 2013.
As partial
consideration for the advance of the loan, the lender is to be
issued a standby fee of 1,500,000 common shares of the Corporation
(the "Standby Fee Shares").
The proceeds from
the secured loan have been used to repay and eliminate amounts owed
to Cordy's prior senior secured lender.
Complete copies of
Cordy's reviewed unaudited interim condensed consolidated financial
statements for the quarter ended September 30, 2013 and the
associated Management's Discussion and Analysis are available on
our website www.cordy.ca or on SEDAR at www.sedar.com.
Neither the TSX
Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
READER ADVISORY
Effective January 1,
2011, Cordy began reporting its financial results in accordance
with International Financial Reporting Standards (IFRS).
Prior-year's comparative amounts were changed to reflect results as
if Cordy had always prepared its financial results using IFRS.
This News Release
contains certain statements that constitute forward-looking
statements. These statements relate to future events or the
Corporation's future performance. All statements, other than
statements of historical fact, that address activities, events or
developments that the Corporation or a third party expects or
anticipates will or may occur in the future, are forward-looking
statements. These include the Corporation's future growth, results
of operations, performance and business prospects and
opportunities; prevailing economic conditions; commodity prices;
sourcing, pricing and availability of raw materials, components and
parts, equipment, suppliers, facilities and skilled personnel;
dependence on major customers; uncertainties in weather and
temperature affecting the duration of the service periods and the
activities that can be completed; regional competition; and other
factors, many of which are beyond the Corporation's control. These
other factors include future prices of oil and natural gas and oil
and natural gas industry activity, including the effect of changes
in commodity prices on oil and natural gas exploration and
development activity, the ability to complete strategic
acquisitions and realize the anticipated benefits of any
acquisitions that are completed, the Corporation's outlook
regarding the competitive environment it operates in, and the
assumptions underlying any of the foregoing. Forward-looking
statements are often, but not always, identified by the use of
words such as "seek", "anticipate", "plan", "continue", "estimate",
"expect", "may", "will", "project", "predict", "potential",
"targeting", "intend", "could", "might", " should", "believe" and
similar expressions. These statements involve known and unknown
risks, uncertainties and other factors, many of which are beyond
the Corporation's control, including those discussed under "Risks
and Uncertainties" and elsewhere in this News Release, that may
cause actual results or events to differ materially from those
anticipated in such forward-looking statements. The Corporation
believes that the expectations reflected in those forward-looking
statements are reasonable, but no assurance can be given that these
expectations will prove to be correct and such forward-looking
statements included in this News Release should not be unduly
relied upon. These statements speak only as of the date of this
News Release. The Corporation does not intend, and does not assume
any obligation, to update these forward- looking statements,
whether as a result of new information, future events or otherwise,
except as required under applicable securities laws. The
forward-looking statements contained in this News Release are
expressly qualified by this cautionary statement.
Cordy uses the
measures Earnings Before Interest, Taxes, Depreciation,
Amortization and Impairment and Share Based Compensation (EBITDAS)
in this news release. This measure does not have any standardized
meaning prescribed by International Financial Reporting Standards
(IFRS). It is, therefore, considered to be non-IFRS term and may
not be comparable to similar measures presented by other entities.
Management of Cordy uses these non-IFRS measures to improve its
ability to compare financial results among reporting periods and to
enhance its understanding of operating performance, liquidity and
ability to generate funds to finance operations. This non-IFRS
measure is also provided to readers as additional information on
Cordy's operating performance, liquidity and ability to generate
funds to finance operations. EBITDAS is an approximate measure of
the Cordy's pre-tax operating cash flow and is generally used to
better measure performance and evaluate trends of individual
assets. EBITDAS comprises earnings before deducting interest and
other financial charges, income taxes, depreciation and
amortization, net income attributable to non-controlling interests
and preferred share dividends.
For general information:Cordy Oilfield Services Inc.David
Mullen, Chairman & Chief Executive
Officer403-266-2067403-266-2087david.mullen@cordy.caFor investor
relations information:Cordy Oilfield Services Inc.David Boomer, CA,
Chief Financial
Officer403-266-2067403-266-2087dave.boomer@cordy.cawww.cordy.ca
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